endeavouring to procure more Protection at the expense of others. In France we have had the cotton manufacturers of Normandy at war with those of the Vosges. There are continual struggles between the North and South. France is cut into sections by the Protectionist spirit, and it is a strange delusion to suppose that differential Tariffs will draw closer the bonds of solidarity between the United Kingdom and the self-governing Colonies. Every Colony will think that it is sacrificed to the others.

On May 28th, Mr. Chamberlain said in the House of Commons that he thought Preferential Tariffs would not apply to raw materials; but of the 525 million pounds of wool imported into the United Kingdom in 1902 from British possessions, Australia and New Zealand sent 425 millions, or 80 per cent., and the total amount, including the imports from foreign countries, was only 637 millions. Consequently the Colonies supply the United Kingdom with 82 per cent. of the wool which it can absorb. Is a preferential duty on wool needed to "discourage foreign wool in the interests of colonial wool"? Certainly not. If we take the value we find that in 1901 the total exports of Australia and New Zealand to the United Kingdom rose to £34,590,000, and the value of the wool exported was £15,426,000, or 44 per cent. In that case 44 per cent. of the exports from Australia and New Zealand to the United Kingdom would not receive any tariff benefit. But the less favour which could be shown to one commodity, the higher would have to be the tax on other commodities. Do all the Australasian Colonies produce uniform commodities? The English Government could not grant privileges to the gold, copper, silver, and tin which come to it from Queensland, Victoria, and New South Wales. It would have no resource but to put a high duty upon fresh mutton, so as to favour New Zealand, which sent it in 1901 £2,949,000 worth; or upon corn and flour, to favour Victoria, which sent £1,091,461 worth; or upon butter, also to favour Victoria, which sent £921,505 worth.

But each Colony will assert that one is more favoured than another; nor can it be otherwise since their exports are not identical. Though divided amongst themselves by this chase after advantages, they will all unite against Canada. Of all the Colonies, Canada is the greatest exporter of articles of food, and it will therefore reap the greatest advantage from a Preferential Tariff levied in accordance with Mr. Chamberlain's explanation.

Out of £19,854,000 worth of Canadian imports into the United Kingdom in 1901, articles of food account for more than £5,000,000. Out of the remaining £14,800,000 timber makes up £4,653,000. Consequently, timber and foodstuffs represent 55 per cent. of Canada's exports to the United Kingdom. If articles

of food are selected for taxation so as to benefit Canada, the Australian Colonies will have a right to claim privileges for their ham and lard, and cheese and corn. If timber is chosen, Australian wool will think itself sacrificed.

Undoubtedly there would be negotiations before the system was put into force. The Colonial Governments would know what Preferential Tariffs had been granted to each. But there are only two alternatives. Either the Colonies would tell the United Kingdom what Preferential Tariffs each of them wanted, and then it would be the Colonies who would dictate to the Parliament at Westminster what articles to tax and at what rate to tax them; or the English Government would remain master of its own customs and fiscal policy, and then this or that Colony might refuse the privileges which the Colonial Office was asking, and the compact which was to unite the different parts of the Empire in a closer alliance would break the Empire up.

The experience of the past, as well as the factors which enable us to study the question, show very clearly that a policy of Preferential Tariffs affords no security for a future of peace and concord between the United Kingdom and her self-governing Colonies. It has the inherent defect of introducing a disintegrating factor into English politics. That was clear enough on the very day after Mr. Chamberlain launched his manifesto. It not only broke up the unity of the Conservative party, but it raised the very point which our Nationalist Party raised in the Dreyfus affair. All advocates of revision were then denounced as enemies of the Army. Now, all opponents of Preferential Tariffs will be denounced as enemies of the Colonies and of the unity of the Empire. And if Free Traders get a majority, parties may be formed in the Colonies, fortified by Mr. Chamberlain's authority, prepared to denounce the majority of the English electorate and of the members of Parliament as enemies of the Colonies.

To inaugurate a policy which may result in such a situation is assuredly a singular way of working for the consolidation of the Empire.

III.

A Dangerous Illusion.

Like many other people, I regard Mr. Chamberlain as a politician who combines a strong will with great perspicacity, and I ask with astonishment how he could choose such a platform for the next General Election. The dominant note of his speech of May 15th, was a closer union between the United Kingdom and its Colonies. It is surprising that he should offer such a bait to

the English electorate; for even if his project was enthusiastically welcomed by all the Colonies, the colonists do not choose members of the House of Commons. Then how could Mr. Chamberlain persuade the electors of the United Kingdom to let themselves be influenced by the prospect of new taxes?

On the evening of May 28th, Mr. Chamberlain told us his secret:

"You must put a tax on food. I am prepared to go into any mechanic's house, or any labourer's house, or to address meetings of workmen or labourers, and taking certain hypothetical calculations, for instance, that there was to be one shilling or two shillings on corn, say to them :-'I will assume, for the sake of my argument, that you pay every penny of the duty, and, having assumed that, I will tell you what the cost will be. . . . I will give you a table from which you can tell for yourself how much extra wages you must get in order to cover the extra expenses of living.'

No doubt Mr. Chamberlain could make such a calculation with a fair approach to accuracy. We did it for the French consumer, and we could do it roughly for England.

Mr. Chamberlain went on to say:

"If the hon. gentlemen opposite can show that the whole of this business will mean greater cost of living to the working men, and no increase of income, well, sir, I have not the least doubt whatever that all their most optimistic prophecies will come true. But if I can show that in return for what I ask I will give more than I take, then I may still have a chance."

How is Mr. Chamberlain going to guarantee an "increase of revenue"? He recognises that “in all taxes on consumption, the poorer classes pay three-fourths, and the well-to-do one-fourth." And then he declares that "the working classes are entitled to every penny of the three-fourths," and he "would give them, without the slightest hesitation, the other one-fourth."

The method is ingenious. Mr. Chamberlain says to the workmen : "You think that I am taking something from you. On the contrary I am giving you a present." But what present? "Old age pensions," and "other social reforms," left vague, but certain to cost large sums of money. One certainty, at any rate, Mr. Chamberlain puts before the working classes, a lower purchasing power for their wages, and consequent privation, less bread, less meat, less lard for the same price. This is an entire reversal of the roast-beef system of hygiene which has had such a great success in Great Britain. In exchange he promises a pension to the half of them, who, according to English tables of mortality, will survive to the age of 65, but omits to indicate its precise amount.

Does not his very appeal to the thrift of the working classes,

regardless of their daily welfare, prove Mr. Chamberlain himself guilty of a grave want of foresight? Is he certain that he can fulfil his engagements? Can he both insure the workman against old age, and at the same time insure the State against bankruptcy? or has he drawn a bill of exchange on the future, saying, "Let happen what may; the taxpayers of the future must get out of it somehow" ?

Our experience of pensions in France is not very reassuring. The law of 1853, which fixed the pensions of officials, spells a deficit that augments every year. The total amount of pensions paid by the State to officials, soldiers, and sailors, etc., was 251,000,000 francs, in the Budget of 1903. Almost all the mining and railway companies have had to spend considerable sums to make up the deficits of their pension funds.

To assume, therefore, that Protective duties will suffice to meet expenses of this kind is to run counter to the best authenticated economic facts. When a Protective Tariff fulfils its purpose, it yields no revenue. In France the duty on wheat produces the best financial result when wheat is scarce, and bread is dear. Under a Protectionist system a bad harvest makes a good Budget, and a good harvest a bad Budget. In 1897, a bad harvest year, the duties on cereals brought in 55 million francs; in 1898, 78 million; and they would have brought in even more, if they had not been suspended. They fell to 20 millions in 1900, and to 13,800,000 francs in 1902. How could any pension fund be made dependent on such fluctuating resources? If Mr. Chamberlain's duties had their full effect, they ought to extinguish any receipts by excluding the commodities at which they were aimed. Then what would become of the fund for "old age pensions," and "other social reforms" ?

IV.

French Experience.

One may assume, then, that so far Mr. Chamberlain is not referring to any immediate "increase of income," but only to that future period when the workman who now pays the taxes will reap the benefit in an old age pension. He feels, however, that this bait will not suffice to attract the electorate, and he goes on. to say: "This tax is not intentionally Protective; but I do not want to deny that incidentally it is Protective." And he proceeds to describe the benefits which it will confer upon agriculture.

People always talk about agriculture instead of about landed property. Yet every tax on wheat must result in increasing the revenue from land; and at whose expense? At the expense of

the bread-eaters; that is to say, the greatest number of just those people who can have the least variety in food.

When the duty of 3d. per cwt. was imposed by Sir Michael Hicks-Beach, the Fédération Libre-échangiste of Paris wrote a letter to Lord Welby, in which they maintained that though this tax had been retained by the English Free Traders up to 1869, and was less than the 60 centimes duty which corn had had to bear in France from 1861 to 1883, during a period of comparative commercial liberty, yet "none the less the tax was of a Protectionist character, because it was not only levied on corn passing through the customs, but on all corn coming into the market." The English consumer will pay the tax of Mr. Chamberlain's dreams, upon the 7,285 quarters of wheat grown during 1902 in the United Kingdom, and upon the 107,927,000 cwts. coming from British possessions, as well as upon the 82,482,000 cwts. of foreign wheat. If he does not, the tax will not work, and it will be an illusion.

In a pamphlet on the French Corn Laws, published by the Cobden Club in December, 1887, I gave as my conclusion from certain facts, "Protective duties do not prevent the fall of prices when there is abundance. Powerless to cause a rise when cheapness results from the quantity produced, they cause famine when production is in default and the supply of food scarce."

The Institut International de Statistique, at its meeting in 1901, appointed a Commission, of which I was a member, and M. Arthur Raffalovich was secretary, to study the reflex action of customs duties. The Société d'Economie Politique devoted its session of June 5th to this same question. M. Daniel Zolla, Professor of Rural Economy at the École de Grignon, gave a comparison of the price of wheat in London and Paris for periods of three years. The duty was fixed at 3 francs by the Law of 28th March, 1883.

The duty was raised to 5 francs by the Law of 27th March, 1887.

The Law of 1894 raised the duty to 7 francs.

At the beginning of May, 1903, as the price of wheat had risen, the difference was more than the duty of seven francs. The Journal d'Agriculture Pratique of May 7th, quotes the following prices :-London, 16.50 per 100 kilos; Vienna, 16.80; Budapest, 16-40; Anvers, 16-50; New York, 15.94; Paris, 25 francs. The estimated amount of wheat on the French market in a year is about